Fitzgerald said he was disappointed with Grylls’ discriminatory proposal, which would see BHP and Rio’s rent lift from A25c per tonne to $5/t.

“While it does not apply to Roy Hill, it will most certainly lead to reduced jobs and investment in West Australia,” he said.

“The most compelling and significant issue holding back growth and jobs, is the increasing size of both levels of government in Australia and the very high cost of their approvals permits, licences and compliance.”

Fitzgerald said chairman Gina Rinehart did not support the plan either. Rinehart has long spoken out against regulatory burdens and the cost of doing business in Australia.

New Rio iron ore chief Chris Salisbury told staff in an internal email on Friday that the new tax would have a “devastating impact on our business at the worst possible time in the commodity cycle”.

Salisbury said the tax would be a massive hit to Rio’s iron ore business and placed its sustainability and jobs at risk.

“This tax proposal would have severe knock-on effects on investment, suppliers and communities in Western Australia,” he said.

Rio has paid nearly $11 billion in royalties to the WA government since 2010.

“There are no grounds for a new mining tax in Western Australia, and we will do everything in our power to secure the future of our business, and your jobs, by opposing it,” Salisbury said.

Fortescue Metals Group CEO Nev Power said the government needed to provide certainty.

"State Agreements are an important part of project development in Western Australia and any proposed changes would need to be negotiated carefully with the companies involved," he said. 

"These agreements provide certainty to encourage investment and continued growth, while ensuring our communities benefit from development of projects in the state."